With the month of June quickly wrapping up on a very volatile note, it looks like better buying opportunities lay ahead in the coming month with a lot of uncertainty and no precedent to guide us through the formal leaving of Great Britain from the European Union. Clearly, the worldwide stock markets do not like all this uncertainty and the price action has been reflecting this. Without rehashing the reasoning the British vote went the way it did, one thing is clear… volatility will present us with better buying opportunities than in recent months past, as price, value and yield will start to look more compelling. Putting things into perspective though, the market was a lot uglier in January and February of this year than what we saw after the big decline last week. While Friday was a shock to the system, from a longer term perspective we are not much lower than about a month ago. With that being said, it’s time, once again, for me to lay out some of the potential stock picks I am considering for the month of July.
It’s been a few months since I considered the large Canadian banks for a monthly buy, but in July they are starting to look more attractive as dropping prices have brought up yields and better values. As before I am considering, once again, The Bank of Nova Scotia (BNS), The Toronto-Dominion Bank (TD) and Royal Bank of Canada (RY). All three of these banks are offering up yields north of 4%.
In the same financial vein, I am also considering an American bank that has been quite popular among the DGI community as of late, Wells Fargo & Company (WFC). It’s no surprise that the financial sector took a serious blow last week because of the Brexit fallout and WFC among other names are selling at much better prices and yield. Other names I’m considering include, W.W. Grainger, Inc. (GWW), V.F. Corporation (VFC) and Abbott Laboratories (ABT). These were the same names I considered last month and I ended up pulling the trigger on AbbVie Inc. (ABBV) instead. As you can see below, all the companies mentioned offer decent yield and all have low to moderate payout ratios ensuring safe dividends that even have room to grow based on current cash flow.
What do you think about my potential stock picks for July? Are any of the above names on your monthly watch list? Is the Brexit panic keeping you on the sidelines or are you jumping in the market? Please let me know below and I welcome any suggestions too.
Disclosure: Long BNS, TD, RY, WFC, VFC, GWW, ABT, ABBV